The California PUC at its Oct. 10 meeting unanimously approved the sale of two small Pacific Gas & Electric hydroelectric projects.

Although the sales had encountered protracted procedural delays, there were greenlighted at them meeting as part of the commission's consent agenda.

The 5.7 MW Deer Creek Hydroelectric Project is being sold to the Nevada Irrigation District [P-14530] for $1. Although the facilities have an estimated fair market value of negative $7.5 million, they are old, and the sales are the best option for ratepayers, according to the CPUC.

PG&E expects to take a $32.3-million pre-tax loss from the Deer Creek sale. The Utility Reform Network suggested that the loss be amortized over a three-year period to dampen any potential effect on the utility's authorized revenue requirement and rates.

The transaction must still be approved by FERC. Once granted, the closing process should take two or three months.

Also on the consent calendar was the utility's request to sell the Narrows Hydro Project to the Yuba County Water Agency, a 12-MW facility on the Yuba River in Nevada County is licensed by FERC through 2026 [P-1404].

CPUC had voted unanimously at its March 28 meeting to deny the request without prejudice on procedural grounds, but said it wanted to address the larger policy issue of what should happen to aging hydro facilities that appear to have outlived their usefulness to generate power.

PG&E had sought the approval through a pilot program available using the advice-letter process, which the commission denied at the March meeting, saying the information provided was insufficient and did not enable it to determine whether or not the terms of the transfer were reasonable. However, on advice of the CPUC, the utility submitted a formal application via a Public Utilities Code Section 851 transaction filing, which was approved.

The sale price for the facility is $507,500. PG&E will be taking an estimated pre-tax loss on sale of $4.5 million, as well as an after-tax loss on sale that is expected to be $3.2 million.

CPUC staff said that because the Narrows project's operations already coordinate with those of the Yuba County Water Agency's 55 MW Narrows No. 2 powerhouse [P- 2246], the agency is "a well-situated natural buyer" for the project.

'The utility, which is the largest investor-owned utility operator of hydroelectric power systems in the country, has for the past several years been selling smaller hydropower plants it deemed economically unviable.